What Happens When There Is A Dispute Amongst Co-Founders Of A Company?
By Team Legistify / 2016-12-10
Drama happens even in situations where you wouldn’t expect it to crop up. Success will cover up many sins. When things are going up and to the right, things might be going wrong underneath and you won’t be aware of it. It’s the black ice of startups. It’s dangerous because every startup will hit the skids sooner or later. You can’t count on good times forever- winter is coming.

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In India, according to the Companies Act 2013, there can be two types of companies i.e. one started by a single person as the founder and the other with more than one coming together as co-founders. So when a company is started with a few people coming together as co-founders, it has its pros and cons.

Leaving the advantages and brighter side of such a company for another day, if we look at the problematic side, the relationship between the founders or the creators of the company plays a very important role as a startup company could be ultimately doomed by a co-founder dispute and even small disagreements amongst them can systematically erode the core of your company. Sometimes even the original creators may find themselves at a crisis point where they no longer understand each other or their plans for the dream program they created for companies that are prevailing over long period time in the business market.

Kinds of Conflicts between Co-Founders

Some of the reasons which lead to such conflicts and disputes amongst the co-founders of a company are as follows:

  • Anything that impacts the amount of money made for the various founders has the potential to generate conflict and is also one of the most common factors leading to conflict amongst co-founders.
  • Also when founders begin arguing about who is doing how much, it eventually leads to a dispute situation. Though it is natural for each co-founder to invest time/energy based on her situation, it is not agreed by all in a team of people working together.
  • Another question commonly raised by co-founders that can lead to a lot of disagreement is who gets to make the decisions around.
Drama happens even in situations where you wouldn’t expect it to crop up. Success will cover up many sins. When things are going up and to the right, things might be going wrong underneath and you won’t be aware of it. It’s the black ice of startups. It’s dangerous because every startup will hit the skids sooner or later. You can’t count on good times forever- winter is coming.

Have a Legal Issue?

Get connected to the Best Lawyers and Chartered Accountants Near You!


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